I came across this acronym "FIRE" often in the financial blogosphere. It stands for Financial Independence Retire Early. Many young Singaporean financial bloggers also blogged about their plans and roadmap to achieve FIRE. Some of them aimed to achieve FIRE by age 35!

While I admire their determination and actions taken to achieve FIRE, I worry for them when those plans and actions involved cutting down expenses to the bone. They still have a long way to go in life and life has a way of throwing up "curved balls" along your way. So planning your retirement or financial independence based on what you see in the present time is not a good way to know what you might need to cater for in the distant future. For eg., as a young person or young family, you may think that you could survive on $3k a month and you decide to "retire" once your passive income can cover this amount, you will be in for a very rude shock a few years down the road when you see your expenses creep beyond your passive income not just because of inflation, but because of growing needs as you get older.

I don't advocate retiring from work that early in life, especially before 55. Is working really that bad? Working, besides giving you a life sustaining income, also enlarges your social circle, provides different experiences and exposures and equips you with some professional skills.

FIRE does not apply to me anymore as I am already 56. But the idea of being financially independent is attractive at any age. It gives us options.

I started investing in shares the moment I got my first pay check. At time, the motivation was to make my savings grow, but little did I know then that it was the start of a passive income source. Now, 30+ years later, this one source of income (shares) is providing us a passive income of $50k pa. Together with 2 other sources of passive income, we are currently deriving passive incomes in excess of $120k pa.

I would advise my younger colleagues to achieve FI without the RE. And not to blindly achieve FI by cutting down expenses to the bone, but cutting down only the frivolous expenses.